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Fraud*According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain*As defined in Wikipedia

Wednesday, August 17, 2011

Goldman Sachs will be pleased that it set aside $2 billion for legal matters because it will need a few million of that to pay for lawsuits that have recently been filed. What could stop all these payouts is for the justice system to put the perpetrators in jail instead of allowing them to reach into their pockets time and time again in order to pay off the system. These suits are just penny ante stuff when a corporation that is worth many billions of dollars knows how to work the system to get the best deals all round. That's what all this looks like.

Maybe William K. Black is right when he says that Holder should resign if he doesn't go after some criminal prosecutions for bankers that created toxic CDOs and fraudulently made billions of dollars at the expense of the pubic.

Goldman Sachs Group Inc. (GS) was sued by Allstate Insurance Co. over the sale of more than $100 million worth of residential mortgage-backed securities that the insurer claims the bank itself called “junk” and “lemons.”

Allstate asked for damages including the lost market value of the securities, plus principal and interest payments in the complaint filed today in New York state Supreme Court in Manhattan.

The insurer, based in Northbrook, Illinois, has filed similar suits against JPMorgan Chase & Co. over $700 million of mortgage-backed securities the bank sold the insurer; Credit Suisse Group AG (CSGN) units for more than $231 million of the securities; Bank of America Corp.’s Merrill Lynch unit over some $167 million; Citigroup Inc. (C), over more than $200 million; and Deutsche Bank AG (DBK), over about $185 million. Allstate said the banks misrepresented underwriting standards, owner occupancy data and loan-to-value ratios.

Goldman knew these types of securities were “junk,” “dogs,” “crap” and “lemons,” according to today’s suit, which claims the words are Goldman’s own, recently revealed in governmental investigations, to describe them.

Michael Duvally, a spokesman for Goldman Sachs, declined to comment on the suit.

Goldman Sachs said in a quarterly filing last week that Allstate was among entities that “threatened to assert claims against the firm in connection with various mortgage-related offerings.”

Allstate purchased more than $123 million of the securities from April 2006 to March 2007 in reliance on Goldman’s misrepresentations and omissions, according to the complaint.

NEW YORK, Aug 17 (Reuters) - Bond insurer CIFG Assurance North America [CADEGA.UL] has sued Goldman Sachs Group (GS.N) and M&T Bank Corp (MTB.N) in New York state court, claiming they fraudulently convinced CIFG to insure $275 million in mortgage-backed securities.

CIFG is the latest bond insurer to sue Goldman over mortgage-backed securities that went bad, and the latest to make a similar claim -- that Goldman knowingly sold shaky mortgage bonds to get the risk off its books. ACA Financial Guaranty [ACAFG.UL] sued Goldman in January for similar reasons. [ID:nN06139329]

The suit, filed Tuesday, relates to securities from a portfolio of 6,204 loans, most of which CIFG said were made by M&T. Goldman subsequently packaged them and sold the GSAA Home Equity Trust 2007-S1 in February 2007; CIFG insured the Class A-1 certificates from the securitization.

CIFG said in the suit that it has reviewed a sample of loans from the portfolio that are in default and that most of them violate Goldman's own guidelines and M&T's representations and warranties on the loans.

"Consistent with the findings from this sample, the loans in the asset pool -- most of which should never have been made in the first place, let alone sold and packaged into a securitization -- have been defaulting at staggering rates, with delinquencies beginning prior to closing of the securitization and increasing rapidly thereafter," the suit said.

CIFG asked the court to order Goldman and M&T to compensate it for claims it may have to pay out in the hundreds of millions of dollars, as well as to buy back the nonperforming loans from the portfolio.

Goldman Sachs declined to comment. An M&T spokesman was not immediately available to comment. CIFG is currently in run-off, managing existing policies but not writing any new business. It is in the process of transferring much of its public finance portfolio to Assured Guaranty (AGO.N).

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COMMENTS:

There are no disinterested parties...real punitive damages will never be realized.

See...

Rolling Stone Alleges Official Corruption?

Matt goes on to detail actual cases - including Lehman and Madoff - where allegations were made, investigated and then the records intentionally destroyed in apparent contravention of the law.

Our government wants us to "invest"? To believe in the markets? To believe that there's a cop, and that when someone does a bad thing they will be punished? When, as alleged....

In at least one case, according to Flynn, investigators at the SEC found their desire to investigate an influential bank thwarted by senior officials in the enforcement division – whose director turned around and accepted a lucrative job from the very same bank they had been prevented from investigating.

Really? You want me to invest eh? To trust the "system", the "government" and "the rules."

We here at FedUpUSA just love Mr. Black. If we have any hope of our economy recovering, those responsible for the massive fraud and the looting of Americans must be prosecuted. It really is that simple.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

Flynn discovered a directive on the enforcement division's internal website ordering staff to destroy "any records obtained in connection" with closed MUIs. The directive appeared to violate federal law, which gives responsibility for maintaining and destroying all records to the National Archives and Records Administration. Over a decade earlier, in fact, the SEC had struck a deal with NARA stipulating that investigative records were to be maintained for 25 years – and that if any files were to be destroyed after that, the shredding was to be done by NARA, not the SEC.

But Flynn soon learned that the records for thousands of preliminary investigations no longer existed. In his letter to Congress, Flynn estimates that the practice of destroying MUIs had begun as early as 1993, and has resulted in at least 9,000 case files being destroyed. For all the thousands of tips that had come in to the SEC, and the thousands of interviews that had been conducted by the agency's staff, all that remained were a few perfunctory lines for each case. The mountains of evidence gathered were no longer in existence.

hat request sparked a worried response from Paul Wester, NARA's director of modern records. On July 29th, 2010, Wester sent a letter to Barry Walters, who oversees document requests for the SEC. "We recently learned from Darcy Flynn... that for the past 17 years the SEC has been destroying closed Matters Under Inquiry files," Wester wrote. "If you confirm that federal records have been destroyed improperly, please ensure that no further such disposals take place and provide us with a written report within 30 days."

Wester copied the letter to Adam Storch, a former Goldman Sachs executive who less than a year earlier had been appointed as managing executive of the SEC's enforcement division. Storch's appointment was not without controversy. "I'm not sure what's scarier," Daniel Indiviglio of The Atlantic observed, "that this guy worked at an investment bank that many believe has questionable ethics and too cozy a Washington connection, or that he's just 29." In any case, Storch reacted to the NARA letter the way the SEC often does – by circling the wagons and straining to find a way to blow off the problem without admitting anything.

All anyone needs to do to get information on which to base an investigation of any of the parties who participated in the financial meltdown is the same thing that Khuzami did: send a letter to the whole organization asking for whistle blowers. Those are the only people who will come forward, as everyone else, including the executives and the managers, is implicated by his actions (or inaction).

Maybe the US should sub contract out the justice department,SEC,CFTC,FINRA to the Philippines instead of just call centers?..it might help catch tbtf and reduce unnecessary high end phony regulatory jobs,,,?

Aquino Invokes Eliot Ness in Corruption War

Philippine President Benigno Aquino has ordered his guards to protect officials hunting tax evaders in an anti-corruption drive aimed at drawing investors to his country, which he says offers a “far greater” return than its Southeast Asian neighbors.

“We’re going after very entrenched and very vested interests,” he said in an interview in the presidential palace in Manila. Al Capone “got caught on tax evasion, not murder, not corruption, by not paying his taxes, that amazed me,” said Aquino, who recalled being inspired by Capone’s nemesis Eliot Ness as portrayed in the 1959 series The Untouchables.

it doesn't matter how many lawsuits get filed, the fed will simply allow them as a bank holding company to borrow from the discount window and relend to the government at a spread. The result will be a collapse in the USD and in middle class savings purchasing power. GS by playing the yield curve with its co-conspirator the fed will use the profits to pay bonuses, legal fees and settlements. And so there goes what was once a great republic.

Goldman Sachs VP Changed His Name, Now Advances Goldman Lobbying Interests As A Top Staffer To Darrell IssaThursday 18 August 2011

Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then quietly went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs’ bottom line.

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The men the American people admire most extravagantly are the greatest liars; the men they detest most violently are those who try to tell them the truth. … H.L. Mencken

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It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe he has prepared himself for the commission of every other crime. … Thomas Paine 1737-1809, Anglo-American Political Theorist, Writer

Laws just or unjust may govern mens actions. Tyrannies may restrain or regulate their words. The machinery of propaganda may pack their minds with falsehood and deny them truth for many generations of time. But the soul of man thus held in trance or frozen in a long night can be awakened by a spark coming from God knows where and in a moment the whole structure of lies and oppression is on trial for its life.: Sir Winston ChurchillWhen governments fear the people, there is liberty. When the people fear the government, there is tyranny. - Thomas Jefferson

When cheaters prosper, we end up with the worst possible system and to call it a free market system is an obscenity. -William BlackWhen the people fear their government, there is tyranny; when the government fears the people, there is liberty." - Thomas JeffersonI believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered. Thomas Jefferson - 1802

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